Tuesday, January 12, 2010

Sandy-based baby-photo Kiddie Kandids shutting doors

Little notice to employees, customers

Published: Monday, Jan. 11, 2010 10:43 p.m. MST

Kristen Turner was looking forward to Monday, day one of her promotion to manager of a Murray Kiddie Kandids studio. Instead, a few minutes after midnight, she was told the company was folding, effective immediately.

And the news throughout the day kept getting worse: Along with a couple thousand employees of the Sandy-based baby-photo business, she's out of work, may not be paid for the past two weeks' labor and no longer has health insurance or access to a COBRA policy, either.

The company confirmed the closure in a two-paragraph statement faxed to newsrooms Monday afternoon, blaming "negative growth" on the economy and a decision by lenders to "no longer fund Kiddie Kandids' operations." The company said it plans to file for Chapter 7 bankruptcy this week.

The 35-year-old chain has 184 locations, including at least a dozen between Provo and Ogden. Most of the nationwide locations are at Babies"R"Us stores.

Company officials did not return calls from the Deseret News, and there's no word on what will happen to customers' special orders.

According to information on a blog set up for employees: "Because of the unforeseen termination of funding by the lenders, there is no money to pay payroll (both past and future), there is no money to reimburse expenses, and there is no money to pay our suppliers. … We regret to inform you there is no money to pay health-related bills from the company's self-insured plan, thus you do not have health insurance. There are no COBRA programs available from defunct plans such as ours, either."

"We don't even know if insurance claims from the past week or so are covered," Turner said.

"I did not see this one coming at all," said Matt Birch, who had been the company spokesman. "I found out last night in a phone call, and they told me almost nothing."

"It was last minute, with no heads-up at all, and we're upset," said Deborah Stanford, an employee who gathered with others at the Valley Fair Mall studio Monday morning, where one described them all as "shell-shocked."

Turner said her district manager called at 10:30 p.m. Sunday and told her all the stores would be closed Monday. She said she asked if she should be worried, but was told it was just for the day. She and another manager reached a corporate trainer who said the company was filing for bankruptcy and closing permanently. "We were told it would only reopen if someone wants to buy it and make good on all the debt."

At 12:12 a.m. Monday, district manager Wayne Royall sent his team, including Turner, a text message that read: "Hey there team, the final word that I have received is that Kiddie Kandids is closing our doors for good. I am truly sorry to be the one to share this news with everyone."

Shoppers hoping to get their babies' pictures taken were greeted Monday at Fashion Place with a handwritten sign: "Due to unforeseen turn of events, Kiddie Kandids as a company will be closed until further notice. Sorry for any inconvenience."

Wrote employee Jessica Oliverson on a family blog: "Kiddie Kandids has closed its doors forever. On top of that, I've been told, they aren't paying us for the last two weeks that we have worked. And if they are paying us, they don't have to pay us immediately. They can get away with this because they claimed bankruptcy. Thousands of employees are getting laid off tonight across the U.S., and the way we found out was through the grapevine and Facebook."

Sorenson Capital, which had a multimillion-dollar investment in Kiddie Kandids, released a statement Monday saying it was "deeply saddened" by the chain's closure.

"We were surprised and disappointed by the banks' sudden decision to immediately terminate all funding for Kiddie Kandids, which resulted in employees receiving no advance notice of the company's failure," it said. "Our hearts go out to the many excellent and loyal employees who were impacted by the sudden loss of their income."

Sorenson Capital, which said it did not profit from its investment in the company, blamed the closure on a sustained economic downturn combined with a photography marketplace shift that has seen increased availability of inexpensive, user-friendly digital photography technology. "Together, these forces effectively damaged Kiddie Kandids' in-store photography customer base beyond repair," it said.

"We had no desire to see this company fail and exhausted every conceivable effort before arriving at the painful conclusion that there is no reasonable opportunity to reverse the company's fortunes. It is our hope that if the assets are purchased out of bankruptcy, the buyer will consider hiring back many of Kiddie Kandids' former employees."

Thirteen hundred employees and their families are in shock today.

Randy is on a business trip in Nashville -- his business credit card was cancelled, leaving him to pay his own hotel fee, etc.

Randy has been in the corporate office of this company for 12 years now. They were his largest account when he worked as a professional photo rep for Kodak just prior to that. He helped Kiddie Kandids transform from film to the world of digital photography. The company was sold to corporate investors four years ago. The investors made some pretty bad decisions expanding too big, too fast and literally ran this once healthy photo company right into a wall.

As was mentioned in the above article (by the way, this event was publicized nation-wide) No one will receive pay for the past two weeks, no PTO; health insurance claims that were stamped "accepted" are now being rescinded (the business was self-health insured; "insufficient funds" they say) I received my first call today...from the Endoscopy Clinic, who performed a procedure that was completed in NOVEMBER! Insurance will not pay. December was NOT a good time to have hand surgery, Randy's front teeth replaced (the ones that I crushed with a racquetball racquet last year), or tests done on his stomach and legs.

There are moments in life that leave us in tears and bring us to our knees. I am writing this in hopes that in the coming months, I will see "the hand of the Lord" in our lives and will be able to make a full report.

About Me

It is likely that my personal life's events and perceptions will be the central focus of this sight; but Randy and I are eternally connected, thus the Blog Title. The best thing in life is to reach the point of Grand-parenthood. "Gammie and Potts" are the nicknames we have assumed. I have just turned fifty-years-old. In an attempt to stay "with it" in society, I have become a blogger. My husband (and his photography), my children, my grandchildren, the gospel of Jesus Christ, and music are my passions in life. What better way to share them!
10/22/08